What is an Antitrust Violation?

For small businesses and large corporations, antitrust laws were designed by Congress to help the economy thrive and sustain a healthy future. In addition to protecting businesses, antitrust laws offer protections to consumers against deceptive or misleading business practices. Antitrust laws are vital to the US economy, and antitrust violations happen when someone (individual or corporation) violates one of the antitrust laws. Antitrust violations are easy to avoid if you follow the guidelines set in place and consult an antitrust lawyer or federal agency if you have any questions.

 

An Overview of Antitrust Law

 

Antitrust laws are an important part of maintaining a stable economy, and several of the laws today have been in effect for over 100 years. In 1890, Congress passed the first antitrust law, the Sherman Act, and in 1914, Congress passed two more antitrust laws, the Federal Trade Commission Act and the Clayton Act. Even with minor revisions, all three of these laws are still in effect today and work to keep a thriving American economy.

 

The Sherman Act- The Sherman Act prohibits conspiracy or schemes in trading and attempts to monopolize an industry or sector. The Sherman Act is the antitrust law with the most severe punishments because offenders can also have criminal charges brought by the Department of Justice.

 

The Federal Trade Commission Act- The Federal Trade Commission Act is important because it led to the creation of the Federal Trade Commission (FTC), an independent agency that enforces antitrust law to corporations and advocates for consumer protection. The Federal Trade Commission Act banned competition and business practices that are partisan, unethical, deceptive, or discriminatory.

 

The Clayton Act- The Clayton Act provides regulations and guidelines where the Sherman Act left off, specifically on limiting mergers and acquisitions that will hurt competitors or monopolize an industry or sector. In 1936, the Clayton Act was amended by the Robinson-Patman Act to prohibit determined discriminatory prices, services, and actions between merchants, and in 1976, the Clayton Act was again amended by the Hart-Scott-Rodino Antitrust Improvements Act to obligate businesses who are planning substantial mergers or acquisitions to alert government agencies beforehand.

 

In addition to these three federal laws, most states have their own antitrust laws in place.

 

An Explanation of an Antitrust Violation

 

Antitrust violations are when an individual or corporation breaks an antitrust law. Antitrust violations have serious consequences for the individual or corporation, and antitrust law and potential violations are monitored by both state and federal agencies.

 

What are Common Antitrust Violations?

 

Common antitrust violations typically are either an agreement to limit competition or an attempt to build a monopoly, and some violations are a combination of the two categories. In practical terms, common types of antitrust violations include the following:

 

• Bid Rigging
• Boycotts
• Market Divison or Allocation
• Monopolization
• Price Fixing
• Tying

 

Common Misconceptions on Antitrust Violations

 

Monopolies are illegal.

 

Monopolies are not illegal if they dominate the market the proper way; it’s the deception of creating a purposeful monopoly that is illegal. If a company achieves a market monopoly by having a superior product or service, it will not be punished, but if the company achieves a market monopoly by using dishonest and unethical practices to acquire or dissolve competitors, they will be in a monopoly violation.

 

Antitrust laws are outdated.

 

While certain antitrust laws are over a century old, they have been amended and revised to keep up with modern economic times. Their principles and guidelines are still relevant today and effective in keeping the US economy afloat.

 

Antitrust laws cater to small businesses.

 

Antitrust laws are in place to protect small businesses and large corporations alike. Antitrust laws were created to safeguard companies against unfair competition, not unfair competitors. These laws were created to protect companies against illegal monopolies or acquisitions but do not provide a safety net against healthy competition.

 

Because antitrust law and violations can be confusing and overwhelming, it’s best to contact a lawyer specializing in antitrust law, if you have any legal questions or concerns.